Journalist, entrepreneur and marketing firm founder. I write about higher ed and early career issues. Pithily. I was pontificating about Millennials and Millennial culture back when they were still known as Gen Y.

Are Stingy Employers To Blame For The So-Called Skills Shortage?

Think America is suffering from a serious skills gap? Think again, says Adam Davidson in a piece for The New York Times. Davidson argues that the inability of employers to recruit skilled workers, particularly in the manufacturing industry, is not a result of a mismatch between the type of education being undertaken by students and the skill sets demanded by the current job market, but rather a function of low wages being offered by employers. Companies can’t hire the skilled workers they need because they don’t pay them enough. And young workers are avoiding in-demand jobs because they’re seeking better salaries elsewhere.

The numbers bear out this argument. Of the top five fast-growing occupations in America, four of them pay $27K or less a year – which is only slightly above the poverty threshold for a family of four – but all five require specialized skills and training beyond a high school diploma in many jurisdictions. For example, personal care workers whose employers receive Medicare reimbursements are required to pass a competency test and federal law recommends they undergo at least 75 hours of classroom and on-the-job training under the supervision of a registered nurse. There very well may be lots of open jobs in this field, but for a median salary of $19K, plenty of prospective personal care workers might opt to work retail – where the median salary for a sales associate is around $25K – and fold sweaters instead of changing bedpans.

Davidson pays particular attention to the manufacturing industry, which is often mentioned as suffering acutely from a small skilled labor pool. Currently, manufacturing wages are hovering around their 2000 level and as The Wall Street Journal notes, high unemployment and rising global competition means that employers are able to wring wage and benefit concessions from unions and employees in order to avoid outright job cuts, making the sector as a whole less attractive to potential hirees. But the skills gap in the manufacturing sector has actually been overstated, according to the Boston Consulting Group. They find that there is a gap of 80 000 – 100 000 jobs, which represents less than 8% of the country’s total highly-skilled manufacturing workforce. And even the most sought-after position represented by those 80 000 – 100 000 jobs – welders and machinists among them – only earn an average of $36K – $40K.

The imminent retirement of the Baby Boomers complicates any discussion of the skills shortage. At the same time employers have difficulty in filling current positions, they’re also staring down the barrel of losing a significant portion of their older workforce. The oldest of the Boomers started hitting retirement age in 2011. In a joint survey by the Society for Human Resource Management and AARP, 71% of HR professionals said that while they realized that losing skilled older workers could pose problems in their workplace, their companies hadn’t done any formal strategic planning around how to address this exodus. And the reality of retiring Boomers is expected to hit manufacturers particularly hard, with the largest companies in the industry expected to face costs of $100M each over the next five years as they try to fill vacancies left by skilled retirees, which in turn increases pressure to cut operational costs, including payroll.

Davidson concludes his piece by claiming that what we think of as a skills gap is really a gap in education – employers would hire workers and provide needed training to allow them to grow into well-paying jobs, but current graduates and job seekers don’t even have the basic math and science skills required to make them appropriate trainees. While he’s in the ballpark when it comes to the need for education, the real emphasis should be on educating both prospective employees and employers on managing their expectations. Employers cannot expect to recruit and retain the top-tier talent that will allow them to compete globally with rock-bottom wages and college grads cannot expect that a four-year liberal arts education will be sufficient (or even necessary) to grant them access to the highly-paid careers of the next decade and beyond.

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Education-based skills gaps mentioned in this piece also are emerging, and getting worse. One major way to curb them is to invest in career and technical education (CTE). CTE has proven to deliver many benefits, including improved student achievement and career/earning prospects, more community vitality and more qualified workers for the jobs of today. When businesses work with educators, CTE programs are especially effective.

The Industry Workforce Needs Council is a new group of businesses working together to spotlight skills gaps and advocate for CTE as a means of bridging them. For more information on the IWNC, or to join the effort, visit www.iwnc.org.

If there is a problem of not enough people being willing to work for the stated wages, wouldn’t the companies naturally increase the wages they are willing to pay? This seems like an issue of supply/demand on the workforce.

In my own field I see job descriptions mentioning a certain set of skills and a certain degree. Why the hell does it matter what degree a person has if they have the actual skills (unless Jeff Schmidt, of Disciplined Minds, is correct)?!

How much lateral move within the organization do you allow? For decades companies have been externalizing training instead of allowing opportunities for demonstrably talented workers to develop new skills (without transferring around at the lower pay-grades, that is).